Perelman after Morgan Stanley again

Chicago legal team will try to collect $200M-$400M in interest

Ronald O. Perelman's lawyers at Chicago-based Jenner & Block LLP are heading back to court next week to try to collect another $200 million to $400 million in interest in the billionaire financier's successful fraud lawsuit against Morgan Stanley.

Led by Jenner chairman Jerold S. Solovy and Florida attorney Jack Scarola, Mr. Perelman's legal team scored a big victory last month when a jury ruled that Morgan Stanley must pay Mr. Perelman $1.45 billion in damages. The lawyers had argued successfully that the New York-based investment bank misled Mr. Perelman about the financial condition of its client, Sunbeam Corp., when Sunbeam acquired Coleman Co., a company Mr. Perelman controlled.

The attorneys will return to court on June 21 to argue that Morgan Stanley owes interest on the damages going back to Sunbeam's Chapter 11 bankruptcy filing in 2001. Morgan Stanley will contest the motion and plans to appeal the entire judgment, a spokesman said.

Among a number of issues to be addressed next week is a disagreement between the parties over a settlement Mr. Perelman reached with Sunbeam itself. Mr. Perelman received 23 million Sunbeam warrants, which Mr. Solovy contends are now worthless, but which Morgan Stanley says were worth $110 million.

The embattled Wall Street investment firm will argue the judgment against it should be reduced by $110 million.

While the Morgan Stanley case has Jenner riding high, it's a different story over at crosstown firm Kirkland & Ellis LLP. Morgan Stanley hired Kirkland to represent it in the Perelman suit but fired the firm on the eve of the trial after being rebuked by the judge for failing to produce evidence in the case. Morgan Stanley has threatened a malpractice suit against Kirkland.

Jenner, meanwhile, stands to collect a tidy sum if the ruling in the Morgan Stanely case stands, though Mr. Solovy declined to discuss fees.

"We never comment specifically, but let's say it's a nice case," he said.